RBI Monetary Policy Committee Announcement- Highlights

Monetary Policy Committee (MPC) of Reserve Bank of India (RBI) announced its bi-monthly policy statement on December 8, 2021.


  • In its policy statement, RBI has maintained status quo on key rates for the ninth consecutive time.
  • RBI continues to maintain its ‘Accommodative’ stance and the five members of MPC have voted in favour of the same.
  • The repo rate has been kept unchanged at 4% as well as reverse repo rate remains the same at 3.35%.
  • RBI has also not changed the Marginal Standing Facility (MSF) & Bank Rate, keeping at 4.25%.
  • The policy statement is in line with the expectations of Majority of economists as world scare due to the new covid variant Omicron.


RBI has decreased the repo rate by a total of 115 basis points (bps) since March 2020 to overcome the blow of coronavirus pandemic. It is followed by a 135 bps rate cuts since 2019.

Key points of the policy statement

  • As per RBI governor, headline inflation will peak in the fourth quarter of fiscal year 2021-22.
  • RBI will allow banks to make one-time pre-payment related to TLTRO.
  • Liquidity absorption will be managed through auction route, starting from January 2022.
  • Central bank will continue to manage liquidity to maintain financial stability.
  • Government consumption is increasing from August 2021, which is turn is providing support to aggregate demand.
  • RBI as retained CPI inflation projection at 5.3% in 2021-22.
  • There is a cut in excise duty on petrol, diesel in order to reduce the inflation rate on durable basis.
  • RBI has projected the real GDP growth at 17.2% for Q1 and at 7.8% for Q2 of 2022-23.
  • In Financial year 2022, RBI retains the GDP growth target at 9.5%.

Monetary Policy Committee (MPC)

MPC is responsible for fixing benchmark interest rate in India. MPC holds its meetings at least 6 times a year and publishes its decisions after each meeting. Committee has 6 members- Three officials of the RBI & three external members nominated by Government of India. The Governor of RBI acts as the chairperson ex officio of the MPC.


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